According to the theory of comparative advantage, a country should specialize in producing a good that involves

a. more inputs than those in other countries.

b. fewer inputs than those in other countries.

c. a higher opportunity cost than that of other countries.

d. a lower opportunity cost than that of other countries.

Question

Social Studies

Izaiah Andrade

29 May, 09:17

According to the theory of comparative advantage, a country should specialize in producing a good that involves

a. more inputs than those in other countries.

b. fewer inputs than those in other countries.

c. a higher opportunity cost than that of other countries.

d. a lower opportunity cost than that of other countries.

+3

Answers (2)

Know the Answer?

Brody Nichols · Answer 1

d. a lower opportunity cost than that of other countries

Explanation:

comparative advantage means the benefit you get for an exchange of something. In this case scenario, the country should produce something that would have a lower opportunity cost because then they would be losing less. If it were to have a higher opportunity cost, that would mean the country is loosing more than it is gaining, and that is certainly what it does not aim.

Collins · Answer 2

The correct answer is option d.

Explanation:

The theory of comparative advantage was given by David Ricardo. It states that a country should trade the good that it specializes in. A country is said to be specialized in the production of a good that it can produce at a comparatively lower opportunity cost.

Opportunity cost is the cost of sacrificing the second-best alternative.

The theory of absolute advantage, on the other hand, stated that a country should produce and trade a good that it can produce at a lower cost.